EUROPE – UK logistics will outperform retail over the next few years as maturing e-commerce provides a rare opportunity for investors to exploit structural change, according to Legal & General Property (LGP) business space research manager Bill Page.

Page said real estate "lagged 10 years behind" in its response to e-commerce, not least because the property industry still viewed them as separate asset classes.

"It's an opportunity for investors to think holistically – and those who act first will outperform," he said.

LGP, which has £1.6bn (€1.9bn) invested in industrial and £2.7bn in retail, forecasts the share of online retail will reach 20-25% by 2020.

The fastest annual growth – between 10% and 12% – will come from grocery sales.

Page said e-commerce had changed the definition of 'prime' from the best asset in the best location to the asset best able to lower the cost of delivery.

Meanwhile, investors' use of data to predict logistics types based on factors such as affluence and population density would generate "new geographies" as assets' internal specifications would became more significant.

Emerging distribution and collection mechanisms will drive asset specifications including maximum storage density, building depth and wider column spacing, he said.

Although regional e-fulfilment depots with strong covenants would prove most attractive for investors, Page said smaller order sizes would translate into site expandability options, with an increase in dark stores close to population centres.

Despite their appeal to liability-matching institutional investors as long-lease assets, Page said retailers requiring more flexibility and third-party, contract-driven logistics firms could resist longer leases, although automated units would require them to justify cost amortisation.

He cited supermarket retailer Tesco's shift from in-store packing – which proved disruptive above 10% of store activity – towards a hybrid also involving edge-of-town dark stores.